The two groups, based thousands of miles apart between their US and Australian headquarters, will merge their middleware technologies and core engineering teams as part of a new joint venture. No equity will change hands.

The partnership will look to tweak and improve Emergent’s products – such as Gamebryo and Gamebryo LightSpeed – though a collaborative R&D effort with Krome.

Emergent will also begin to co-develop its own games, in a new game development enterprise bolstered by Krome’s twelve-year know-how. Several titles are earmarked for release, the first to launch in 2011.

Last year Emergent reduced its engineering team as part of a restructuring operation that renewed focus on sales and support. The move resulted in healthy sales records, though fewer engine updates.

Now with one eye on the inevitable successor to Gamebryo Lightspeed, the firm said sharing tech and teams with Krome provides an ideal opportunity.

Krome – one of the largest independent studios in the world – has recently made difficult decisions in the era of austerity. In the last twelve months it has, on at least three occasions, made redundancies at its studios – though CEO Robert Walsh says some repors of the layoffs have exaggerated numbers.

The combined companies’ work will be owned and exclusively licensed by Emergent, in a move the firms say will “drive a robust roadmap for cross-platform engines, world-class product support and advanced tool features”.